EXHIBIT 1.1
USFREIGHTWAYS CORPORATION
UNDERWRITING AGREEMENT
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1. Introductory. USFreightways Corporation, a Delaware corporation
("Company"), proposes to issue and sell from time to time certain of its
unsecured debt securities registered under the registration statement referred
to in Section 2(a) (the "Debt Securities"). The Debt Securities and Guarantees
(as defined below) will be issued under an indenture, dated as of May 5, 1999
("Indenture"), among the Company, the Guarantors (as defined below) and Bank
One, as Trustee, in one or more series, which series may vary as to interest
rates, maturities, redemption provisions, selling prices and other terms, with
all such terms for any particular series of the Debt Securities being determined
at the time of sale. The Debt Securities will be fully and unconditionally
guaranteed on a senior basis pursuant to the terms of the Indenture (the
"Guarantees" and together with the Debt Securities, the "Registered Securities")
by the persons listed on Schedule B to the Terms Agreement (each a "Guarantor,"
and collectively, the "Guarantors"). Particular series of the Registered
Securities will be sold pursuant to a Terms Agreement referred to in Section 3,
for resale in accordance with terms of offering determined at the time of sale.
The term "Indenture," as used herein, includes (a) the Officers' Certificate (as
defined in the Indenture) establishing the form and terms of the Debt Securities
pursuant to Sections 102 and 301 of the Indenture and (b) any amendments or
supplements to the Indenture.
The Registered Securities involved in any such offering are hereinafter
referred to as the "Offered Securities". The firm or firms which agree to
purchase the Offered Securities are hereinafter referred to as the
"Underwriters" of such securities, and the representative or representatives of
the Underwriters, if any, specified in a Terms Agreement referred to in Section
3 are hereinafter referred to as the "Representatives"; provided, however, that
if the Terms Agreement does not specify any representative of the Underwriters,
the term "Representatives", as used in this Agreement (other than in Sections
2(b), 5(c) and 6 and the second sentence of Section 3), shall mean the
Underwriters.
2. Representations and Warranties of the Company and the Guarantors. The
Company and the Guarantors, jointly and severally, as of the date of each Terms
Agreement referred to in Section 3, represent and warrant to, and agree with,
each Underwriter that:
(a) The Company meets the requirements for use of Form S-3 under the
Securities Act of 1933, as amended (the "Act"). A registration statement
(No. 333- ), including a prospectus, relating to the Registered
Securities has been filed with the Securities and Exchange Commission
("Commission") and has become effective under the Act, no stop order
suspending the effectiveness of the registration statement has been issued
under the Act, no proceedings for that purpose have been instituted or are
pending or, to the knowledge of the Company, are contemplated by the
Commission, and any request on the part of the Commission for additional
information has been complied with. Such registration statement, as
amended at the time of any Terms Agreement referred to in Section 3, is
hereinafter referred to as the "Registration Statement", and the prospectus
included in such Registration Statement, as supplemented as contemplated by
Section 3 to reflect the terms of the Offered Securities and the terms of
offering thereof, as first filed with
the Commission pursuant to and in accordance with Rule 424(b) ("Rule
424(b)") under the Act, including all material incorporated by reference
therein, is hereinafter referred to as the "Prospectus". No document has
been or will be prepared or distributed in reliance on Rule 434 under the
Act.
(b) On the effective date of the Registration Statement relating to
the Registered Securities, such Registration Statement conformed in all
respects to the requirements of the Act, the Trust Indenture Act of 1939
("Trust Indenture Act") and the rules and regulations of the Commission
("Rules and Regulations") and did not include any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading, and on
the date of each Terms Agreement referred to in Section 3, the Registration
Statement and the Prospectus will conform in all respects to the
requirements of the Act, the Trust Indenture Act and the Rules and
Regulations, and neither of such documents will include any untrue
statement of a material fact or omit to state any material fact required to
be stated therein or necessary to make the statements therein not
misleading, except that the foregoing does not apply to statements in or
omissions from any of such documents based upon written information
furnished to the Company by any Underwriter through the Representatives, if
any, specifically for use therein.
(c) Each Prospectus delivered to the Underwriters for use in
connection with any Terms Agreement will be identical to the electronically
transmitted copies thereof filed with the Commission pursuant to its
electronic data gathering, analysis and retrieval system.
(d) The documents incorporated or deemed to be incorporated by
reference in the Registration Statement or the Prospectus, at the time they
were filed with the Commission, complied and will comply in all material
respects with the requirements of the Securities and Exchange Act of 1934,
as amended (the "Exchange Act"), and the Rules and Regulations thereunder.
(e) There are no contracts or documents that are required to be
described in the Registration Statement or the documents incorporated by
reference therein or to be filed as exhibits thereto that have not been so
described and filed as required.
(f) The Company has been duly incorporated and is an existing
corporation in good standing under the laws of the State of Delaware, with
power and authority (corporate and other) to own, lease and operate its
properties and conduct its business as described in the Registration
Statement and the Prospectus and to enter into and perform its obligations
under the Terms Agreement (including the provisions of this Agreement); the
Company is duly qualified to do business as a foreign corporation in good
standing in all other jurisdictions in which its ownership or lease of
property or the conduct of its business requires such qualification; the
shares of issued and outstanding capital stock of the Company have been
duly authorized and validly issued and are fully paid and non-assessable;
and none of the outstanding shares of capital stock of the Company was
issued in violation of the preemptive or other similar rights of any
securityholder of the Company.
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(g) Each Guarantor has been duly incorporated and is an existing
corporation in good standing under the laws of the jurisdiction of its
incorporation, with power and authority (corporate and other) to own, lease
and operate its properties and conduct its business as described in the
Registration Statement; each Guarantor has the power and authority
(corporate or other) to enter into and perform its obligations under the
Terms Agreement (including the provisions of this Agreement); each
Guarantor is duly qualified to do business as a foreign corporation in good
standing in all other jurisdictions in which its ownership or lease of
property or the conduct of its business requires such qualification; all of
the issued and outstanding capital stock of each Guarantor has been duly
authorized and validly issued and is fully paid and nonassessable and is
owned by the Company, directly or through subsidiaries, free and clear from
any security interest, mortgage, pledge, lien, encumbrance, claim or
equity; and none of the outstanding shares of capital stock of any
subsidiary was issued in violation of the preemptive or similar rights of
any securityholder of any subsidiary. The only subsidiaries of the Company
are (i) the Guarantors and (ii) certain other subsidiaries which,
considered in the aggregate as a single subsidiary, do not constitute a
"significant subsidiary" as defined in Rule 1-02 of Regulation S-X.
(h) The Indenture has been duly authorized by the Company and each
Guarantor and has been duly qualified under the Trust Indenture Act; the
Offered Securities have been duly authorized by the Company and each of the
Guarantors; and when the Offered Securities are delivered and paid for
pursuant to the Terms Agreement on the Closing Date (as defined in Section
3) or pursuant to Delayed Delivery Contracts (as hereinafter defined), the
Indenture will have been duly executed and delivered and will conform to
the description thereof contained in the Prospectus, such Offered
Securities will have been duly executed, authenticated, issued and
delivered and will conform to the description thereof contained in the
Prospectus, and the Indenture and such Offered Securities will constitute
valid and legally binding obligations, respectively, of the Company and the
Guarantors, enforceable in accordance with their respective terms, subject
to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium
and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles.
(i) No consent, approval, authorization, license, registration,
qualification, decree of, order of, or filing with, any governmental agency
or body or any court is required for the consummation of the transactions
contemplated by the Terms Agreement (including the provisions of this
Agreement) in connection with the issuance and sale of the Offered
Securities by the Company and the Guarantors, or for the due execution,
delivery or performance of the Indenture by the Company and the Guarantors,
except such as have been obtained and made under the Act and the Trust
Indenture Act and such as may be required under state securities laws.
(j) Except as disclosed in the Prospectus, the Company and its
subsidiaries have good and marketable title to all real properties and all
other properties and assets owned by them, in each case free from liens,
encumbrances and defects that would materially affect the value thereof or
materially interfere with the use made or to be made thereof by them or, if
determined adversely to the Company or any of its subsidiaries, would
individually or in the aggregate have a material adverse effect on the
condition (financial or other),
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business, properties or results of operations of the Company and its
subsidiaries taken as a whole ("Material Adverse Effect"); and except as
disclosed in the Prospectus, the Company and its subsidiaries hold any
leased real or personal property under valid and enforceable leases and
neither the Company nor any subsidiary has any notice of any material claim
of any sort that has been asserted by anyone adverse to the rights of the
Company or any subsidiary under any of the leases mentioned above, or
affecting or questioning the rights of the Company or such subsidiary to
the continued possession of the leased premises under any such lease that
would materially interfere with the use made or to be made thereof by them.
(k) Neither the Company nor any of the Guarantors is in violation of
its charter or by-laws; neither the Company nor any of the Guarantors is in
default in the performance or observance of any obligation, agreement,
covenant or condition contained in any contract, indenture, mortgage, deed
of trust, loan or credit agreement, note, lease or other agreement or
instrument to which the Company or any of the Guarantors is a party or by
which it or any of them may be bound, or to which any of the property or
assets of the Company or any Guarantor is subject (collectively,
"Agreements and Instruments") except for such defaults that would not
result in a Material Adverse Effect; and the execution, delivery and
performance of the Terms Agreement (including the provisions of this
Agreement), any Delayed Delivery Contracts, the Indenture and the Offered
Securities and the consummation of and compliance with the transactions
contemplated thereby and in the Registration Statement do not and will not,
whether with or without the giving of notice or passage of time or both,
conflict with or constitute a breach of, or default or Repayment Event (as
defined below) under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or any
Guarantor pursuant to the Agreements and Instruments (except for such
conflicts, breaches or defaults or liens, charges or encumbrances that
would not result in a Material Adverse Effect), nor will such action result
in a violation of the provisions of the charter or by-laws of the Company
or any Guarantor. As used herein, a "Repayment Event" means any event or
condition that gives the holder of any note, debenture or other evidence of
indebtedness (or any person acting on such holder's behalf) the right to
require the repurchase, redemption or repayment of all or a portion of such
indebtedness by the Company or any Guarantor.
(l) The execution, delivery and performance of the Indenture, the
Terms Agreement (including the provisions of this Agreement) and any
Delayed Delivery Contracts and the issuance and sale of the Offered
Securities and compliance with the terms and provisions thereof will not
result in a breach or violation of any of the terms and provisions of, or
constitute a default under, any applicable law, statute, rule, regulation,
judgment, order, writ, decree or order of any governmental agency or body
or any court, domestic or foreign, including, without limitation, the
Federal Highway Administration ("FHA"), the United States Department of
Transportation ("DOT") or any applicable state highway and transportation
agency, having jurisdiction over the Company or any Guarantor of the
Company or any of their properties, assets or any agreement or instrument
to which the Company or any Guarantor is a party or by which the Company or
any Guarantor is bound or to which any of the properties or assets of the
Company or any Guarantor is subject, or the charter or by-laws of the
Company or any Guarantor.
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(m) The Terms Agreement (including the provisions of this Agreement)
and any Delayed Delivery Contracts have been duly authorized, executed and
delivered by the Company and the Guarantors.
(n) The Company and its subsidiaries possess such permits, licenses,
approvals, consents, certificates and other authorizations (collectively,
"Governmental Licenses") issued by appropriate federal, state, local or
foreign regulatory agencies or bodies, including, without limitation, the
FHA, the DOT and any applicable state highway and transportation agencies,
that are necessary to conduct the business now operated by them; the
Company and its subsidiaries are in compliance with the terms and
conditions of all such Governmental Licenses, except where failure so to
comply would not individually or in the aggregate, have a Material Adverse
Effect; all of the Governmental Licenses are valid and in full force and
effect, except where the invalidity of such Governmental Licenses or the
failure of such Governmental Licenses to be in full force and effect would
not have a Material Adverse Effect; and neither the Company nor any of its
subsidiaries has received any notice of proceedings relating to the
revocation or modification of any such Governmental Licenses that
individually or in the aggregate, if the subject of any unfavorable
decision, ruling or finding, would result in a Material Adverse Effect.
(o) No labor dispute with the employees of the Company or any
subsidiary exists or, to the knowledge of the Company or the Guarantors, is
imminent that might have a Material Adverse Effect and neither the Company
nor any Guarantor is aware of any existing or imminent labor disturbance by
the employees of any of its or any Guarantor's principle suppliers,
manufacturers, customers or contracts which may reasonably be expected to
result in a Material Adverse Effect.
(p) The Company and its subsidiaries own, possess or can acquire on
reasonable terms, adequate trademarks, trade names and other rights to
inventions, know-how (including trade secrets and other unpatented and/or
unpatented proprietary or confidential information, licenses, systems or
procedures), patents, patent rights, copyrights, confidential information
and other intellectual property (collectively, "intellectual property
rights") necessary to conduct the business now operated by them, or
presently employed by them, and have not received any notice or is
otherwise aware of infringement of or conflict with asserted rights of
others with respect to any intellectual property rights or of any facts or
circumstances that would render any intellectual property rights invalid or
inadequate to protect the interest of the Company or any of its
subsidiaries, and that, if determined adversely to the Company or any of
its subsidiaries, would individually or in the aggregate have a Material
Adverse Effect.
(q) Except as disclosed in the Prospectus, neither the Company nor
any of its subsidiaries is in violation of any statute, any rule,
regulation, decision, policy or order of any governmental agency or body or
any court or any interpretation thereof, domestic or foreign, relating to
the use, disposal or release of hazardous or toxic substances or relating
to the protection or restoration of the environment or human exposure to
hazardous or toxic substances (collectively, "environmental laws"), owns
or operates any real property contaminated with any substance that is
subject to any environmental laws, is liable for any off-site disposal or
contamination pursuant to any environmental laws, or is subject to any
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claim relating to any environmental laws, which violation, contamination,
liability or claim would individually or in the aggregate have a Material
Adverse Effect and neither the Company nor any Guarantor is aware of any
pending investigation which might lead to such a claim.
(r) Except as disclosed in the Prospectus, there are no pending
actions, suits, proceedings, inquiries, or investigations brought before
or brought by any court or governmental agency or body, domestic or
foreign, including, without limitation, the FHA, the DOT or any applicable
state highway and transportation agency, now pending, or, to the knowledge
of the Company, threatened, against or affecting the Company, any of its
subsidiaries or any of their respective properties or assets that, if
determined adversely to the Company or any of its subsidiaries, might
reasonably be expected to individually or in the aggregate have a Material
Adverse Effect, or might reasonably be expected to materially and adversely
affect the ability of the Company or any Guarantor to perform its
obligations under the Indenture, the Terms Agreement (including the
provisions of this Agreement) or any Delayed Delivery Contracts, or which
are otherwise material in the context of the sale of the Offered
Securities; no such actions, suits or proceedings are threatened or, to the
Company's or any Guarantor's knowledge, contemplated; and the aggregate of
all pending legal or governmental proceedings to which the Company or any
subsidiary is a party or of which any of their respective properties or
assets is the subject that are not described in the Prospectus, including
ordinary routine litigation incidental to the business, could not
reasonably be expected to result in a Material Adverse Effect.
(s) The financial statements included in the Registration Statement
and Prospectus present fairly the financial position of the Company and its
consolidated subsidiaries as of the dates shown and their results of
operations and cash flows for the periods shown, and such financial
statements have been prepared in conformity with the generally accepted
accounting principles in the United States applied on a consistent basis;
any schedules included in the Registration Statement present fairly the
information required to be stated therein; and, if pro forma financial
statements are included in the Registration Statement and Prospectus; the
assumptions used in preparing the pro forma financial statements included
in the Registration Statement and the Prospectus provide a reasonable basis
for presenting the significant effects directly attributable to the
transactions or events described therein, the related pro forma adjustments
give appropriate effect to those assumptions, and the pro forma columns
therein reflect the proper application of those adjustments to the
corresponding historical financial statement amounts.
(t) The accountants who certified the financial statements and
supporting schedules included in the Registration Statement and Prospectus
are independent public accountants as required by the Act and the Rules and
Regulations thereunder.
(u) Except as disclosed in the Prospectus, since the date of the
latest audited financial statements included in the Prospectus there has
been no material adverse change, nor any development or event involving a
prospective material adverse change, in the condition (financial or other),
business, properties or results of operations of the Company and its
subsidiaries taken as a whole, and, except as disclosed in or contemplated
by the
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Prospectus, there has been no dividend or distribution of any kind
declared, paid or made by the Company on any class of its capital stock.
(v) The Company and the Guarantors are not and, after giving effect
to the offering and sale of the Offered Securities and the application of
the proceeds thereof as described in the Prospectus, will not be an
"investment company" as defined in the Investment Company Act of 1940.
(w) Neither the Company nor any of its affiliates does business with
the government of Cuba or with any person or affiliate located in Cuba
within the meaning of Section 517.075, Florida Statutes and the Company
agrees to comply with such Section if prior to the completion of the
distribution of the Offered Securities it commences doing such business.
3. Purchase and Offering of Offered Securities. The obligation of the
Underwriters to purchase the Offered Securities will be evidenced by an
agreement or exchange of other written communications ("Terms Agreement") at the
time the Company determines to sell the Offered Securities. The Terms Agreement
will incorporate by reference the provisions of this Agreement, except as
otherwise provided therein, and will specify the firm or firms which will be
Underwriters, the names of any Representatives, the principal amount to be
purchased by each Underwriter, the purchase price to be paid by the Underwriters
and the terms of the Offered Securities not already specified in the Indenture,
including, but not limited to, interest rate, maturity, any redemption
provisions and any sinking fund requirements and whether any of the Offered
Securities may be sold to institutional investors pursuant to Delayed Delivery
Contracts (as defined below). The Terms Agreement will also specify the time
and date of delivery and payment (such time and date, or such other time not
later than seven full business days thereafter as the Underwriter first named in
the Terms Agreement (the "Lead Underwriter") and the Company agree as the time
for payment and delivery, being herein and in the Terms Agreement referred to as
the "Closing Date"), the place of delivery and payment and any details of the
terms of offering that should be reflected in the prospectus supplement relating
to the offering of the Offered Securities. For purposes of Rule 15c6-1 under
the Exchange Act, the Closing Date (if later than the otherwise applicable
settlement date) shall be the date for payment of funds and delivery of
securities for all the Offered Securities sold pursuant to the offering, other
than Contract Securities for which payment of funds and delivery of securities
shall be as hereinafter provided. The obligations of the Underwriters to
purchase the Offered Securities will be several and not joint. It is understood
that the Underwriters propose to offer the Offered Securities for sale as set
forth in the Prospectus.
If the Terms Agreement provides for sales of Offered Securities pursuant to
delayed delivery contracts, the Company authorizes the Underwriters to solicit
offers to purchase Offered Securities pursuant to delayed delivery contracts
substantially in the form of Annex I attached hereto ("Delayed Delivery
Contracts") with such changes therein as the Company may authorize or approve.
Delayed Delivery Contracts are to be with institutional investors, including
commercial and savings banks, insurance companies, pension funds, investment
companies and educational and charitable institutions. On the Closing Date, the
Company will pay, as compensation, to the Representatives for the accounts of
the Underwriters, the fee set forth in such Terms Agreement in respect of the
principal amount of Offered Securities to be sold pursuant to Delayed Delivery
Contracts ("Contract Securities"). The Underwriters will not have any
responsibility in respect of the validity or the performance of Delayed Delivery
Contracts. If the Company executes and delivers Delayed Delivery Contracts, the
Contract Securities will be deducted from the Offered Securities to be purchased
by the several Underwriters and the aggregate principal amount of Offered
Securities to be purchased by each Underwriter will be reduced pro rata in
proportion to the principal amount of Offered
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Securities set forth opposite each Underwriter's name in such Terms Agreement,
except to the extent that the Lead Underwriter determines that such reduction
shall be otherwise than pro rata and so advise the Company. The Company will
advise the Lead Underwriter not later than the business day prior to the Closing
Date of the principal amount of Contract Securities.
If the Terms Agreement specifies "Book-Entry Only" settlement or otherwise
states that the provisions of this paragraph shall apply, the Company will
deliver against payment of the purchase price the Offered Securities in the form
of one or more permanent global securities in definitive form (the "Global
Securities") deposited with the Trustee as custodian for The Depository Trust
Company ("DTC") and registered in the name of Cede & Co., as nominee for DTC.
Interests in any permanent global securities will be held only in book-entry
form through DTC, except in the limited circumstances described in the
Prospectus. Payment for the Offered Securities shall be made by the Underwriters
in Federal (same day) funds by official check or checks or wire transfer to an
account previously designated by the Company at a bank acceptable to the Lead
Underwriter, in each case drawn to the order of at the place of
payment specified in the Terms Agreement on the Closing Date, against delivery
to the Trustee as custodian for DTC of the Global Securities representing all of
the Offered Securities.
4. Certain Agreements of the Company and the Guarantors. The Company and
each Guarantor, jointly and severally, agrees with the several Underwriters that
it will furnish to counsel for the Underwriters, one signed copy of the
registration statement relating to the Registered Securities, including all
exhibits, in the form it became effective and of all amendments thereto and
that, in connection with each offering of Offered Securities:
(a) The Company will file the Prospectus with the Commission pursuant to
and in accordance with Rule 424(b)(2) (or, if applicable and if consented
to by the Lead Underwriter, subparagraph (5)) not later than the second
business day following the execution and delivery of the Terms Agreement.
(b) The Company will advise the Lead Underwriter promptly of any
proposal to amend or supplement the Registration Statement or the
Prospectus and will afford the Lead Underwriter a reasonable opportunity to
comment on any such proposed amendment or supplement; and the Company will
also advise the Lead Underwriter promptly of the filing of any such
amendment or supplement and of the institution by the Commission of any
stop order proceedings in respect of the Registration Statement or of any
part thereof and will use its best efforts to prevent the issuance of any
such stop order and to obtain as soon as possible its lifting, if issued.
(c) If, at any time when a prospectus relating to the Offered Securities
is required to be delivered under the Act in connection with sales by any
Underwriter or dealer, any event occurs as a result of which the Prospectus
as then amended or supplemented would include an untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, or if it is necessary at any time to amend the
Prospectus to comply with the Act, the Company promptly will notify the
Lead Underwriter of such event and will promptly prepare and file with the
Commission, at its own expense, an amendment or supplement which will
correct such statement or omission or an amendment which will effect such
compliance. Neither the Lead Underwriter's consent to, nor the
Underwriters' delivery of, any such amendment or supplement shall
constitute a waiver of any of the conditions set forth in Section 5 hereof.
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(d) As soon as practicable, but not later than 16 months, after the date
of each Terms Agreement, the Company will make generally available to its
securityholders an earnings statement covering a period of at least 12
months beginning after the later of (i) the effective date of the
registration statement relating to the Registered Securities, (ii) the
effective date of the most recent post-effective amendment to the
Registration Statement to become effective prior to the date of such Terms
Agreement and (iii) the date of the Company's most recent Annual Report on
Form 10-K filed with the Commission prior to the date of such Terms
Agreement, which will satisfy the provisions of Section 11(a) of the Act.
(e) The Company will furnish to the Representatives copies of the
Registration Statement, including all exhibits, any related preliminary
prospectus, any related preliminary prospectus supplement, the Prospectus
and all amendments and supplements to such documents, in each case as soon
as available and in such quantities as the Lead Underwriter reasonably
requests. The Company will pay the expenses of printing and distributing
to the Underwriters all such documents.
(f) The Company will arrange for the qualification of the Offered
Securities for sale and the determination of their eligibility for
investment under the laws of such jurisdictions as the Lead Underwriter
designates and will continue such qualifications in effect so long as
required for the distribution.
(g) During the period of five years after the date of any Terms
Agreement, the Company will furnish to the Representatives and, upon
request, to each of the other Underwriters, if any, as soon as practicable
after the end of each fiscal year, a copy of its annual report to
stockholders for such year; and the Company will furnish to the
Representatives (i) as soon as available, a copy of each report and any
definitive proxy statement of the Company filed with the Commission under
the Securities Exchange Act of 1934 or mailed to stockholders, and (ii)
from time to time, such other information concerning the Company as the
Lead Underwriter may reasonably request.
(h) The Company will pay all expenses incident to the performance of its
obligations under the Terms Agreement (including the provisions of this
Agreement), for any filing fees or other expenses (including fees and
disbursements of counsel) in connection with qualification of the
Registered Securities for sale and determination of their eligibility for
investment under the laws of such jurisdictions as the Lead Underwriter may
designate and the printing of memoranda relating thereto, for any fees
charged by investment rating agencies for the rating of the Offered
Securities, for any applicable filing fee incident to, and the reasonable
fees and disbursements of counsel for the Underwriters in connection with,
the review by the National Association of Securities Dealers, Inc. of the
Registered Securities, for any travel expenses of the Company's officers
and employees and any other expenses of the Company in connection with
attending or hosting meetings with prospective purchasers of Registered
Securities and for expenses incurred in distributing the Prospectus, any
preliminary prospectuses, any preliminary prospectus supplements or any
other amendments or supplements to the Prospectus to the Underwriters.
(i) Neither the Company nor any Guarantor will offer, sell, contract to
sell, pledge or otherwise dispose of, directly or indirectly, or file with
the Commission a registration statement under the Act relating to United
States dollar-denominated debt securities issued or guaranteed by the
Company and having a maturity of more than one year from the date of issue,
or publicly disclose the intention to make any such offer, sale, pledge,
disposition or filing, without the prior written consent of the Lead
Underwriter for a period beginning at the time of execution of the Terms
Agreement and
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ending the number of days after the Closing Date specified under "Blackout"
in the Terms Agreement.
5. Conditions of the Obligations of the Underwriters. The obligations of
the several Underwriters to purchase and pay for the Offered Securities will be
subject to the accuracy of the representations and warranties on the part of the
Company and the Guarantors herein, to the accuracy of the statements of Company
officers made pursuant to the provisions hereof, to the performance by the
Company and each Guarantor of its obligations hereunder and to the following
additional conditions precedent:
(a) On or prior to the date of the Terms Agreement, the
Representatives shall have received a letter, dated the date of delivery
thereof, of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP confirming that they are independent public
accountants within the meaning of the Act and the applicable published
Rules and Regulations thereunder and stating to the effect that:
(i) in their opinion the financial statements and any schedules
and any summary of earnings examined by them and included in the
Prospectus comply as to form in all material respects with the
applicable accounting requirements of the Act and the related
published Rules and Regulations;
(ii) they have performed the procedures specified by the
American Institute of Certified Public Accountants for a review of
interim financial information as described in Statement of Auditing
Standards No. 71, Interim Financial Information, on any unaudited
financial statements included in the Registration Statement;
(iii) on the basis of the review referred to in clause (ii)
above, a reading of the latest available interim financial statements
of the Company, inquiries of officials of the Company who have
responsibility for financial and accounting matters and other
specified procedures, nothing came to their attention that caused them
to believe that:
(A) the unaudited financial statements, if any, and any
summary of earnings included in the Prospectus do not comply as
to form in all material respects with the applicable accounting
requirements of the Act and the related published Rules and
Regulations or any material modifications should be made to such
unaudited financial statements and summary of earnings for them
to be in conformity with generally accepted accounting
principles;
(B) if any unaudited "capsule" information is contained in
the Prospectus, the unaudited consolidated net sales, net
operating income, net income and net income per share amounts or
other amounts constituting such "capsule" information and
described in such letter do not agree with the corresponding
amounts set forth in the unaudited consolidated financial
statements or were not determined on a basis substantially
consistent with that of the corresponding amounts in the audited
statements of income;
(C) at the date of the latest available balance sheet read
by such accountants, or at a subsequent specified date not more
than three business days prior to the date of the such letter,
there was any change in the capital stock or any increase in
short-term indebtedness or long-term debt of the Company and its
consolidated
10
subsidiaries or, at the date of the latest available balance
sheet read by such accountants, there was any decrease in
consolidated net current assets or net assets, as compared with
amounts shown on the latest balance sheet included in the
Prospectus; or
(D) for the period from the closing date of the latest
income statement included in the Prospectus to the closing date
of the latest available income statement read by such accountants
there were any decreases, as compared with the corresponding
period of the previous year, in consolidated net sales, net
operating income, per share amounts of consolidated income before
extraordinary items or net income or in the ratio of earnings to
fixed charges;
except in all cases set forth in clauses (C) and (D) above for
changes, increases or decreases which the Prospectus discloses have
occurred or may occur or which are described in such letter; and
(iv) they have compared specified dollar amounts (or percentages
derived from such dollar amounts) and other financial information
contained in the Prospectus (in each case to the extent that such
dollar amounts, percentages and other financial information are
derived from the general accounting records of the Company and its
subsidiaries subject to the internal controls of the Company's
accounting system or are derived directly from such records by
analysis or computation) with the results obtained from inquiries, a
reading of such general accounting records and other procedures
specified in such letter and have found such dollar amounts,
percentages and other financial information to be in agreement with
such results, except as otherwise specified in such letter.
All financial statements and schedules included in material incorporated by
reference into the Prospectus shall be deemed included in the Prospectus
for purposes of this subsection.
(b) The Prospectus shall have been filed with the Commission in
accordance with the Rules and Regulations and Section 4(a) of this
Agreement. No stop order suspending the effectiveness of the Registration
Statement or of any part thereof shall have been issued and no proceedings
for that purpose shall have been instituted or, to the knowledge of the
Company or any Underwriter, shall be contemplated by the Commission.
(c) Subsequent to the execution of the Terms Agreement, there shall
not have occurred (i) any change, or any development or event involving a
prospective change, in the condition (financial or other), business,
properties or results of operations of the Company and its subsidiaries
taken as one enterprise which, in the judgment of a majority in interest of
the Underwriters including any Representatives, is material and adverse and
makes it impractical or inadvisable to proceed with completion of the
public offering or the sale of and payment for the Offered Securities; (ii)
any downgrading in the rating of any debt securities of the Company or of
any Guarantor by any "nationally recognized statistical rating
organization" (as defined for purposes of Rule 436(g) under the Act), or
any public announcement that any such organization has under surveillance
or review its rating of any debt securities of the Company or of any
Guarantor (other than an announcement with positive implications of a
possible upgrading, and no implication of a possible downgrading, of such
rating); (iii) any material suspension or material limitation of trading in
securities generally on the New York Stock Exchange, or any setting of
minimum prices for trading on such exchange, or any
11
suspension of trading of any securities of the Company on any exchange or
in the over-the-counter market; (iv) any banking moratorium declared by
U.S. Federal or New York authorities; or (v) any outbreak or escalation of
major hostilities in which the United States is involved, any declaration
of war by Congress or any other substantial national or international
calamity or emergency if, in the judgment of a majority in interest of the
Underwriters including any Representatives, the effect of any such
outbreak, escalation, declaration, calamity or emergency makes it
impractical or inadvisable to proceed with completion of the public
offering or the sale of and payment for the Offered Securities.
(d) The Representatives shall have received an opinion, dated the
Closing Date, of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ Ltd., counsel for the Company, to the
effect that:
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Delaware;
(ii) The Company has corporate power and authority to own, lease
and operate its properties and to conduct its business as described in
the Prospectus and to enter into and perform its obligations under the
Terms Agreement (including the provisions of this Agreement) and any
Delayed Delivery Contracts;
(iii) The Company is duly qualified as a foreign corporation to
transact business and is in good standing in each jurisdiction in
which such qualification is required, except where the failure so to
qualify or to be in good standing would not result in a Material
Adverse Effect;
(iv) The shares of issued and outstanding capital stock of the
Company have been duly authorized and validly issued and are fully
paid and non-assessable; and none of the outstanding shares of
capital stock of the Company was issued in violation of the preemptive
or other similar rights of any securityholder of the Company;
(v) Each Guarantor (A) has been duly incorporated and is
validly existing as a corporation in good standing under the laws of
the jurisdiction of its incorporation, (B) has corporate power and
authority to own, lease and operate its properties and to conduct its
business as described in the Prospectus and to enter into and perform
its obligations under the Terms Agreement (including the provisions of
this Agreement) and any Delayed Delivery Contracts and (C) is duly
qualified as a foreign corporation to transact business and is in good
standing in each jurisdiction in which such qualification is required,
except where the failure so to qualify or to be in good standing would
not result in a Material Adverse Effect; all of the issued and
outstanding capital stock of each Guarantor has been duly authorized
and validly issued, is fully paid and non-assessable and, to the best
of our knowledge, is owned by the Company, directly or through
subsidiaries, free and clear of any security interest, mortgage,
pledge, lien, encumbrance, claim or equity;
(vi) The Terms Agreement (including the provisions of this
Agreement) and any Delayed Delivery Contracts have been duly
authorized, executed and delivered by the Company and each Guarantor;
12
(vii) The Indenture has been duly authorized, executed and
delivered by the Company and each Guarantor and constitutes a valid
and binding agreement of the Company and each Guarantor, enforceable
against the Company and each Guarantor in accordance with its terms,
except as the enforcement thereof may be limited by bankruptcy,
insolvency (including, without limitation, all laws relating to
fraudulent transfers), reorganization, moratorium or similar laws
affecting enforcement of creditors' rights generally and except as
enforcement thereof is subject to general principles of equity
(regardless of whether enforcement is considered in a proceeding in
equity or at law);
(viii) The Offered Securities are in the form contemplated by
the Indenture, have been duly authorized by the Company and each of
the Guarantors and, other than any Contract Securities, have been duly
executed, issued and delivered by the Company and each of the
Guarantors; the Offered Securities, other than any Contract
Securities, constitute, and any Contract Securities, when executed,
authenticated, issued and delivered in the manner provided in the
Indenture and sold pursuant to Delayed Delivery Contracts, will
constitute, valid and binding obligations of the Company and the
Guarantors, enforceable against the Company and each Guarantor in
accordance with their terms; except as the enforcement of the Offered
Securities may be limited by bankruptcy, insolvency (including,
without limitation, all laws relating to fraudulent transfers),
reorganization, moratorium or similar laws affecting enforcement of
creditors' rights generally and except as enforcement thereof is
subject to general principles of equity (regardless of whether
enforcement is considered in a proceeding in equity or at law), and
will be entitled to the benefits of the Indenture;
(ix) The Indenture has been duly qualified under the Trust
Indenture Act;
(x) The Indenture and the Offered Securities, other than any
Contract Securities, conform, and any Contract Securities, when so
issued and delivered and sold will conform, as to legal matters in all
material respects to the descriptions thereof contained in the
Prospectus;
(xi) The Registration Statement has become effective under the
Act, the Prospectus was filed with the Commission pursuant to the
subparagraph of Rule 424(b) specified in such counsel's opinion on the
date specified therein, and, to the best knowledge of such counsel, no
stop order suspending the effectiveness of the Registration Statement
or any part thereof has been issued and no proceedings for that
purpose have been instituted or are pending or contemplated under the
Act, and the registration statement relating to the Registered
Securities, as of its effective date, the Registration Statement and
the Prospectus, as of the date of the Terms Agreement, and any
amendment or supplement thereto, as of its date, complied as to form
in all material respects with the requirements of the Act, the Trust
Indenture Act and the Rules and Regulations; such counsel has no
reason to believe that such registration statement, as of its
effective date, the Registration Statement, as of the date of the
Terms Agreement or as of the Closing Date, or any amendment thereto,
as of its date or as of the Closing Date, contained any untrue
statement of a material fact or omitted to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading or that the Prospectus, as of the date of the
Terms Agreement or as of
13
such Closing Date, or any amendment or supplement thereto, as of its
date or as of the Closing Date, contained any untrue statement of a
material fact or omitted to state any material fact necessary in order
to make the statements therein, in the light of the circumstances
under which they were made, not misleading; the descriptions in the
Registration Statement and Prospectus of statutes, legal and
governmental proceedings and contracts and other documents are
accurate and fairly present the information required to be shown; and
such counsel does not know of any legal or governmental proceedings
required to be described in the Prospectus which are not described as
required or of any contracts or documents of a character required to
be described in the Registration Statement or Prospectus or to be
filed as exhibits to the Registration Statement which are not
described and filed as required; it being understood that such counsel
need express no opinion as to the financial statements or other
financial data contained in the Registration Statement or the
Prospectus;
(xii) The documents incorporated by reference in the Prospectus
(other than the financial statements and supporting schedules included
therein or omitted therefrom, as to which such counsel need express no
opinion), when they were filed with the Commission complied as to form
in all material respects with the requirements of the Exchange Act and
the Rules and Regulations thereunder;
(xiii) To the best of such counsel's knowledge, except as
disclosed in the Prospectus, there is not pending or threatened any
action, suit, proceeding, inquiry or investigation, to which the
Company or any Guarantor is a party, or to which the property of the
Company or any Guarantor is subject, before or brought by any court or
governmental agency or body, domestic or foreign, that might
reasonably be expected to result in a Material Adverse Effect, or that
might reasonably be expected to materially and adversely affect the
properties or assets thereof or the consummation of the transactions
contemplated in the Terms Agreement (including the provisions of this
Agreement) or the performance by the Company and each Guarantor of its
respective obligations thereunder;
(xiv) The information in "Description of the Guaranteed Notes",
"Description of the Debt Securities" and in the Registration Statement
under Item 15, to the extent that it constitutes matters of law,
summaries of legal matters, the Company's Restated Certificate of
Incorporation and By-laws or legal proceedings, or legal conclusions,
has been reviewed by us and is correct in all material respects;
(xv) To the best of such counsel's knowledge, there are no
statutes or regulations that are required to be described in the
Prospectus that are not described as required;
(xvi) To the best of such counsel's knowledge, neither the
Company nor any Guarantor is in violation of its charter, certificate
or articles of incorporation or by-laws and no default by the Company
or any Guarantor exists in the due performance or observance of any
material obligation, agreement, covenant or condition contained in any
contract, indenture, mortgage, loan agreement, note, lease or other
agreement or instrument that is described or referred to in the
Registration Statement or the Prospectus or filed or incorporated by
reference as an exhibit to the Registration Statement;
14
(xvii) No filing with, or authorization, approval, consent,
license, order, registration, qualification or decree of, any court or
governmental authority or agency, domestic or foreign (other than
under the Act and the Rules and Regulations thereunder, which have
been obtained, or as may be required under the securities or blue sky
laws of the various states and except for the qualification of the
Indenture under the Trust Indenture Act, or other than the FHA, the
DOT or any applicable state highway and transportation agency, as to
which such counsel need express no opinion) is necessary or required
in connection with the due authorization, execution and delivery of
the Terms Agreement (including the provisions of this Agreement) or
any Delayed Delivery Contract or the due execution, delivery or
performance of the Indenture by the Company or for the offering,
issuance, sale or delivery of the Offered Securities or any Contract
Securities;
(xviii) The execution, delivery and performance of the Terms
Agreement (including the provisions of this Agreement), any Delayed
Delivery Contract, the Indenture, the Offered Securities and any
Contract Securities and the consummation of the transactions
contemplated in the Terms Agreement (including the provisions of this
Agreement) and in the Registration Statement (including the issuance
and sale of the Offered Securities and any Contract Securities and the
use of the proceeds from the sale of the Offered Securities or any
Contract Securities as described in the Prospectus under the caption
"Use Of Proceeds") and compliance by the Company and each Guarantor
with its respective obligations under the Terms Agreement (including
the provisions of this Agreement), any Delayed Delivery Contract, the
Indenture, the Offered Securities and any Contract Securities do not
and will not, whether with or without the giving of notice or lapse of
time or both, conflict with or constitute a breach of, or default or
Repayment Event under or result in the creation or imposition of any
lien, charge or encumbrance upon any property or assets of the Company
or any Guarantor pursuant to any contract, indenture, mortgage, deed
of trust, loan or credit agreement, note, lease or any other agreement
or instrument, known to us, to which the Company or any Guarantor is a
party or by which it or any of them may be bound, or to which any of
the property or assets of the Company or any Guarantor is subject
(except for such conflicts, breaches or defaults or liens, charges or
encumbrances that would not have a Material Adverse Effect), nor will
such action result in any violation of the provisions of the charter,
certificate or articles of incorporation or by-laws of the Company or
any Guarantor, or any applicable Illinois law, United States Federal
law or regulation or Delaware corporate law (except such counsel need
not opine on highway or transportation laws relating to the regulation
of the Company, its Guarantors or their businesses by the FHA, the DOT
or any applicable state highway and transportation agency), having
jurisdiction over the Company or any of its Guarantors or any of their
properties; and
(xix) Neither the Company nor any Guarantor is an "investment
company" or an entity "controlled" by an "investment company," as such
terms are defined in the Investment Company Act of 1940.
(e) The Representatives shall have received an opinion, dated the
Closing Date, of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Vice President and General Counsel for
the Company, to the effect that:
15
(i) No consent, approval, authorization, order, registration or
qualification of the FHA, the DOT or any applicable state highway and
transportation agency having jurisdiction over the Company or any of
the Guarantors is required with respect to the due authorization,
execution and delivery of the Terms Agreement (including the
provisions of this Agreement) or any Delayed Delivery Contract or for
the offering, issuance, sale or delivery of the Offered Securities or
any Contract Securities (such counsel may rely on the opinions of
local counsel);
(ii) The execution, delivery and performance of the Terms
Agreement (including the provisions of this Agreement) and any Delayed
Delivery Contract and the consummation of the transactions
contemplated in the Terms Agreement (including the provisions of this
Agreement) and in the Registration Statement (including the issuance
and sale of the Offered Securities and any Contract Securities and the
use of the proceeds from the sale of the Offered Securities or any
Contract Securities as described in the Prospectus under the caption
"Use Of Proceeds") and compliance by the Company and each Guarantor
with its respective obligations under the Terms Agreement (including
the provisions of this Agreement) or any Delayed Delivery Contract do
not and will not result in a violation of any law, ordinance,
administrative or governmental rule or regulation or court decree
applicable to it of the FHA, the DOT or any applicable state highway
and transportation agency;
(iii) Each Guarantor to the best of such counsel's knowledge
holds all licenses, franchises, permits, authorizations, approvals and
orders of and from all governmental regulatory officials and bodies,
including the FHA, the DOT or any applicable state highway and
transportation agencies, that are necessary to own or lease their
properties and conduct their businesses as described in the Prospectus
and are material to the consolidated financial position, stockholders'
equity or results of operations of the Company and its subsidiaries,
taken as a whole; and
(iv) To the best of such counsel's knowledge and other than as
set forth in the Prospectus, neither the Company nor any of the
Guarantors is in violation of any law, ordinance, administrative or
governmental rule or regulation or court decree applicable to it of
the FHA, the DOT or any applicable state highway and transportation
agency, or is not in compliance with any term or condition of, or has
failed to obtain, any license, permit, franchise or other
administrative or governmental authorization of the FHA, the DOT or
any applicable state highway and transportation agency, which
violation, non-compliance or failure to obtain would individually or
in the aggregate have a material adverse effect on the consolidated
financial position, shareholder's equity or results or operations of
the Company and its subsidiaries, taken as a whole.
(f) The Representatives shall have received from Winston & ▇▇▇▇▇▇,
counsel for the Underwriters, such opinion or opinions, dated the Closing
Date, with respect to the incorporation of the Company, the validity of the
Offered Securities, the Registration Statement, the Prospectus and other
related matters as the Representatives may require, and the Company shall
have furnished to such counsel such documents as they request for the
purpose of enabling them to pass upon such matters. In rendering such
opinion, Winston & ▇▇▇▇▇▇ may rely as to the incorporation of the Company
upon the opinion of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ Ltd. referred to above.
16
(g) The Representatives shall have received a certificate, dated the
Closing Date, of the President or any Vice President and a principal
financial or accounting officer of the Company in which such officers, to
the best of their knowledge after reasonable investigation, shall state
that the representations and warranties of the Company in this Agreement
are true and correct, that the Company has complied with all agreements and
satisfied all conditions on its part to be performed or satisfied hereunder
at or prior to the Closing Date, that no stop order suspending the
effectiveness of the Registration Statement or of any part thereof has been
issued and no proceedings for that purpose have been instituted or are
contemplated by the Commission and that, subsequent to the date of the most
recent financial statements in the Prospectus, there has been no material
adverse change, nor any development or event involving a prospective
material adverse change, in the condition (financial or other), business,
properties or results of operations of the Company and its subsidiaries
taken as a whole except as set forth in or contemplated by the Prospectus
or as described in such certificate.
(h) The Representatives shall have received a letter, dated the
Closing Date, of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP which meets the requirements of
subsection (a) of this Section, except that the specified date referred to
in such subsection will be a date not more than three days prior to the
Closing Date for the purposes of this subsection.
The Company will furnish the Representatives with such conformed copies of such
opinions, certificates, letters and documents as the Representatives reasonably
request. The Lead Underwriter may in its sole discretion waive on behalf of the
Underwriters compliance with any conditions to the obligations of the
Underwriters under this Agreement and the Terms Agreement.
6. Indemnification and Contribution. (a) The Company and each Guarantor,
jointly and severally, will indemnify and hold harmless each Underwriter, its
partners, directors and officers and each person, if any, who controls such
Underwriter within the meaning of Section 15 of the Act, against any losses,
claims, damages or liabilities, joint or several, to which such Underwriter may
become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of any material fact
contained in the Registration Statement, the Prospectus, or any amendment or
supplement thereto, or any related preliminary prospectus or preliminary
prospectus supplement, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and will reimburse each
Underwriter for any legal or other expenses reasonably incurred by such
Underwriter in connection with investigating or defending any such loss, claim,
damage, liability or action as such expenses are incurred; provided, however,
that the Company will not be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement in or omission or alleged omission from
any of such documents in reliance upon and in conformity with written
information furnished to the Company by any Underwriter through the
Representatives, if any, specifically for use therein, it being understood and
agreed that the only such information furnished by any Underwriter consists of
the information described as such in the Terms Agreement.
(b) Each Underwriter will severally and not jointly indemnify and hold
harmless the Company and each Guarantor, their directors and officers and each
person, if any, who controls the Company or any Guarantor within the meaning of
Section 15 of the Act, against any losses, claims, damages or liabilities to
which the Company may become subject, under the Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged
17
untrue statement of any material fact contained in the Registration Statement,
the Prospectus, or any amendment or supplement thereto, or any related
preliminary prospectus or preliminary prospectus supplement, or arise out of or
are based upon the omission or the alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, in each case to the extent, but only to the extent, that such
untrue statement or alleged untrue statement or omission or alleged omission was
made in reliance upon and in conformity with written information furnished to
the Company by such Underwriter through the Representatives, if any,
specifically for use therein, and will reimburse any legal or other expenses
reasonably incurred by the Company in connection with investigating or defending
any such loss, claim, damage, liability or action as such expenses are incurred,
it being understood and agreed that the only such information furnished by any
Underwriter consists of the information described as such in the Terms
Agreement.
(c) Promptly after receipt by an indemnified party under this Section of
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under
subsection (a) or (b) above, notify the indemnifying party of the commencement
thereof; but the omission so to notify the indemnifying party will not relieve
it from any liability which it may have to any indemnified party otherwise than
under subsection (a) or (b) above. In case any such action is brought against
any indemnified party and it notifies the indemnifying party of the commencement
thereof, the indemnifying party will be entitled to participate therein and, to
the extent that it may wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel satisfactory to such
indemnified party (who shall not, except with the consent of the indemnified
party, be counsel to the indemnifying party), and after notice from the
indemnifying party to such indemnified party of its election so to assume the
defense thereof, the indemnifying party will not be liable to such indemnified
party under this Section for any legal or other expenses subsequently incurred
by such indemnified party in connection with the defense thereof other than
reasonable costs of investigation. No indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement of any
pending or threatened action in respect of which any indemnified party is or
could have been a party and indemnity could have been sought hereunder by such
indemnified party unless such settlement (i) includes an unconditional release
of such indemnified party from all liability on any claims that are the subject
matter of such action and (ii) does not include a statement as to, or an
admission of, fault, culpability or a failure to act by or behalf of an
indemnified party.
(d) If the indemnification provided for in this Section is unavailable or
insufficient to hold harmless an indemnified party under subsection (a) or (b)
above, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of the losses, claims, damages or
liabilities referred to in subsection (a) or (b) above (i) in such proportion as
is appropriate to reflect the relative benefits received by the Company and the
Guarantors on the one hand and the Underwriters on the other from the offering
of the Offered Securities or (ii) if the allocation provided by clause (i) above
is not permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) above but also
the relative fault of the Company and the Guarantors on the one hand and the
Underwriters on the other in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities as well as any other
relevant equitable considerations. The relative benefits received by the Company
and the Guarantors on the one hand and the Underwriters on the other shall be
deemed to be in the same proportion as the total net proceeds from the offering
(before deducting expenses) received by the Company bear to the total
underwriting discounts and commissions received by the Underwriters. The
relative fault shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by the
Company or the Underwriters and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such untrue statement or
omission. The amount paid by an indemnified party
18
as a result of the losses, claims, damages or liabilities referred to in the
first sentence of this subsection (d) shall be deemed to include any legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any action or claim which is the subject of this
subsection (d). Notwithstanding the provisions of this subsection (d), no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Offered Securities underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages which such Underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Underwriters' obligations in
this subsection (d) to contribute are several in proportion to their respective
underwriting obligations and not joint.
(e) The obligations of the Company and the Guarantors under this Section
shall be in addition to any liability which the Company or any Guarantor may
otherwise have and shall extend, upon the same terms and conditions, to each
person, if any, who controls any Underwriter within the meaning of the Act; and
the obligations of the Underwriters under this Section shall be in addition to
any liability which the respective Underwriters may otherwise have and shall
extend, upon the same terms and conditions, to each director of the Company and
each Guarantor, to each officer of the Company and each Guarantor who has signed
the Registration Statement and to each person, if any, who controls the Company
or any Guarantor within the meaning of the Act.
7. Default of Underwriters. If any Underwriter or Underwriters default in
their obligations to purchase Offered Securities under the Terms Agreement and
the aggregate principal amount of Offered Securities that such defaulting
Underwriter or Underwriters agreed but failed to purchase does not exceed 10% of
the total principal amount of Offered Securities, the Lead Underwriter may make
arrangements satisfactory to the Company for the purchase of such Offered
Securities by other persons, including any of the Underwriters, but if no such
arrangements are made by the Closing Date, the non-defaulting Underwriters shall
be obligated severally, in proportion to their respective commitments under the
Terms Agreement (including the provisions of this Agreement), to purchase the
Offered Securities that such defaulting Underwriters agreed but failed to
purchase. If any Underwriter or Underwriters so default and the aggregate
principal amount of Offered Securities with respect to which such default or
defaults occur exceeds 10% of the total principal amount of Offered Securities
and arrangements satisfactory to the Lead Underwriter and the Company for the
purchase of such Offered Securities by other persons are not made within 36
hours after such default, the Terms Agreement will terminate without liability
on the part of any non-defaulting Underwriter or the Company, except as provided
in Section 8. As used in this Agreement, the term "Underwriter" includes any
person substituted for an Underwriter under this Section. Nothing herein will
relieve a defaulting Underwriter from liability for its default. The respective
commitments of the several Underwriters for the purposes of this Section shall
be determined without regard to reduction in the respective Underwriters'
obligations to purchase the principal amounts of the Offered Securities set
forth opposite their names in the Terms Agreement as a result of Delayed
Delivery Contracts entered into by the Company and the Guarantors.
8. Survival of Certain Representations and Obligations. The respective
indemnities, agreements, representations, warranties and other statements of the
Company and the Guarantors or their respective officers and of the several
Underwriters set forth in or made pursuant to the Terms Agreement (including the
provisions of this Agreement) will remain in full force and effect, regardless
of any investigation, or statement as to the results thereof, made by or on
behalf of any Underwriter, the Company, any Guarantor or any of their respective
representatives, officers or directors or any controlling person, and will
survive delivery of and payment for the Offered Securities. If the Terms
Agreement is terminated pursuant to Section 7 or if for any reason the purchase
19
of the Offered Securities by the Underwriters is not consummated, the Company
and the Guarantors, jointly and severally, shall remain responsible for the
expenses to be paid or reimbursed by it pursuant to Section 4 and the respective
obligations of the Company, the Guarantors and the Underwriters pursuant to
Section 6 shall remain in effect. If the purchase of the Offered Securities by
the Underwriters is not consummated for any reason other than solely because of
the termination of the Terms Agreement pursuant to Section 7 or the occurrence
of any event specified in clause (iii), (iv) or (v) of Section 5(c), the Company
and the Guarantors, jointly and severally, will reimburse the Underwriters for
all out-of-pocket expenses (including fees and disbursements of counsel)
reasonably incurred by them in connection with the offering of the Offered
Securities.
9. Notices. All communications hereunder will be in writing and, if sent
to the Underwriters, will be mailed, delivered or telegraphed and confirmed to
them at their address furnished to the Company in writing for the purpose of
communications hereunder or, if sent to the Company or the Guarantors, will be
mailed, delivered or telegraphed and confirmed at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇.
10. Successors. The Terms Agreement (including the provisions of this
Agreement) will inure to the benefit of and be binding upon the Company, the
Guarantors and such Underwriters as are identified in the Terms Agreement and
their respective successors and the officers and directors and controlling
persons referred to in Section 6, and no other person will have any right or
obligation hereunder.
11. Representation of Underwriters. Any Representatives will act for the
several Underwriters in connection with the financing described in the Terms
Agreement, and any action under such Terms Agreement (including the provisions
of this Agreement) taken by the Representatives jointly or by the Lead
Underwriter will be binding upon all the Underwriters.
12. Counterparts. The Terms Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.
13. Applicable Law. This Agreement and the Terms Agreement shall be
governed by, and construed in accordance with, the laws of the State of New
York, without regard to principles of conflicts of laws.
The Company and each Guarantor hereby submits to the non-exclusive
jurisdiction of the Federal and state courts in the Borough of Manhattan in The
City of New York in any suit or proceeding arising out of or relating to the
Terms Agreement (including the provisions of this Agreement) or the transactions
contemplated thereby.
20
ANNEX I
(Three copies of this Delayed Delivery Contract should be signed and returned
to the address shown below so as to arrive not later than 9:00 A.M.,
New York time, on ........................ ............, 2000)
DELAYED DELIVERY CONTRACT
-------------------------
[Insert date of initial public offering]
USFREIGHTWAYS CORPORATION
c/o [Name and address of representative]
Attention: Investment Banking Department - Transactions Advisory Group
Gentlemen:
The undersigned hereby agrees to purchase from USFreightways Corporation, a
Delaware corporation ("Company"), and the Company agrees to sell to the
undersigned, as of the date hereof, for delivery on , 2000 ("Delivery
Date"),
$..............
principal amount of the Company's [Insert title of securities] ("Securities"),
offered by the Company's Prospectus dated , 2000 and a Prospectus
Supplement dated , 2000 relating thereto, receipt of copies of which
is hereby acknowledged, at % of the principal amount thereof plus accrued
interest, if any, and on the further terms and conditions set forth in this
Delayed Delivery Contract ("Contract").
Payment for the Securities that the undersigned has agreed to purchase for
delivery on the Delivery Date shall be made to the Company or its order in
Federal (same day) funds by certified or official bank check or wire transfer to
an account designated by the Company at a bank acceptable to the Lead
Underwriter, at the office of at A.M. on the Delivery Date upon
delivery to the undersigned of the Securities to be
1
purchased by the undersigned in definitive fully registered form and in such
denominations and registered in such names as the undersigned may designate by
written or telegraphic communication addressed to the Company not less than five
full business days prior to the Delivery Date.
It is expressly agreed that the provisions for delayed delivery and payment
are for the sole convenience of the undersigned; that the purchase hereunder of
Securities is to be regarded in all respects as a purchase as of the date of
this Contract; that the obligation of the Company to make delivery of and
accept payment for, and the obligation of the undersigned to take delivery of
and make payment for, Securities on the Delivery Date shall be subject only to
the conditions that (1) investment in the Securities shall not at the Delivery
Date be prohibited under the laws of any jurisdiction in the United States to
which the undersigned is subject and (2) the Company shall have sold to the
Underwriters the total principal amount of the Securities less the principal
amount thereof covered by this and other similar Contracts. The undersigned
represents that its investment in the Securities is not, as of the date hereof,
prohibited under the laws of any jurisdiction to which the undersigned is
subject and which governs such investment.
Promptly after completion of the sale to the Underwriters the Company will
mail or deliver to the undersigned at its address set forth below notice to such
effect, accompanied by a copy of the opinions of counsel for the Company
delivered to the Underwriters in connection therewith.
This Contract will inure to the benefit of and be binding upon the parties
hereto and their respective successors, but will not be assignable by either
party hereto without the written consent of the other.
[signature page follows]
2
It is understood that the acceptance of any such Contract is in the
Company's sole discretion and, without limiting the foregoing, need not be on a
first-come, first-served basis. If this Contract is acceptable to the Company,
it is requested that the Company sign the form of acceptance below and mail or
deliver one of the counterparts hereof to the undersigned at its address set
forth below. This will become a binding contract between the Company and the
undersigned when such counterpart is so mailed or delivered.
Yours very truly,
..............................
(Name of Purchaser)
By ..........................
..........................
(Title of Signatory)
..........................
..........................
(Address of Purchaser)
Accepted, as of the above date.
USFREIGHTWAYS CORPORATION
on behalf of itself and the Guarantors
By ....................
[Insert Title]
1
USFREIGHTWAYS CORPORATION
("Company")
Debt Securities
TERMS AGREEMENT
---------------
, 2000
To: The Representatives of the Underwriters identified herein
Dear Sirs:
The undersigned agrees to sell to the several Underwriters named in Schedule A
hereto for their respective accounts, on and subject to the terms and conditions
of the Underwriting Agreement filed as an exhibit to the Company's registration
statement on Form S-3 (No. 333- ) ("Underwriting Agreement"), the following
securities ("Offered Securities") on the following terms:
Title: [ %] [Floating Rate][Notes][Debentures][Bonds] Due .
Principal Amount: $ .
Interest: [ % per annum, from , 2000, payable semiannually on
and , commencing , 2000, to holders of record on the
preceding or , as the case may be.] [Zero coupon.]
Maturity: , 2000.
Optional Redemption:
Sinking Fund:
Listing: [None.] [ Stock Exchange.] [The Nasdaq Stock Market Inc.'s
National Market.]
1
Delayed Delivery Contracts: [None.] [Delivery Date shall be
, 2000. Underwriters' fee is % of the principal amount of the Contract
Securities.]
Purchase Price: % of principal amount, plus , 2000.
Expected Reoffering Price: % of principal amount, subject to change by
the [Representative[s] [Underwriters].
Closing: A.M. on , 19 , at , in Federal (same day)
funds.
Settlement and Trading: [Physical certificated form.] [Book-Entry Only via
DTC.]
Blackout: Until days after the Closing Date.
[Name[s] and Address[es] of [Representative[s]] [Underwriter[s]]:]
The respective principal amounts of the Offered Securities to be purchased
by each of the Underwriters are set forth opposite their names in Schedule A
hereto.
The Offered Securities will be fully and unconditionally guaranteed by the
persons listed on Schedule B hereto (collectively, the "Guarantors") on a
senior basis pursuant to the terms of an indenture, dated as of May 5, 1999,
among the Company, the Guarantors, and Bank One, Michigan, as the
successor-in-interest to NBD Bank and as trustee.
The provisions of the Underwriting Agreement are incorporated herein by
reference.
The Offered Securities will be made available for checking and packaging at
the office of at least 24 hours prior to the Closing Date.
For purposes of Section 6 of the Underwriting Agreement, the only
information furnished to the Company by any Underwriter for use in the
Prospectus consists of [(i)] the following information in the Prospectus
furnished on behalf of each Underwriter: the last paragraph at the bottom of
the prospectus supplement cover page concerning the terms of the offering by
the Underwriters, the legend concerning over-allotments [and][,] stabilizing
[and passive market making] on the inside front cover page of the prospectus
supplement--and--, --the concession and reallowance figures appearing in the
paragraph under the caption "Underwriting" in the prospectus supplement [and
the information contained in the paragraph under the caption
"Underwriting" in the prospectus supplement] [; and (ii) the following
information in the prospectus supplement furnished on behalf of :
].
[signature page follows]
2
If the foregoing is in accordance with your understanding of our agreement,
kindly sign and return to the Company one of the counterparts hereof,
whereupon it will become a binding agreement between the Company and the
several Underwriters in accordance with its terms.
Very truly yours,
USFREIGHTWAYS CORPORATION
on behalf of itself and the Guarantors
By ......................
[Insert title]
The foregoing Terms Agreement is hereby confirmed
and accepted as of the date first above written.
...............................
...............................,
Acting on behalf of themselves and as the
Representatives of the several Underwriters.
By
By ............................
[Insert title]
3
SCHEDULE A
Principal
Underwriter Amount
----------- ------
................ $
-------
Total.......................... $
=======
SCHEDULE B